Umbrella Reinsurance
Definition of "Umbrella reinsurance"
Protection for all classes of business including automobile, fire, general liability, homeowners, multiple peril, burglary, and glass, by combining the contracts for these classes of business into one reinsurance contract. This enables the cedant to obtain reinsurance more cheaply, with greater capacity, and with greater spread of risk. An umbrella reinsurance contract is offered to one set of reinsurers who all take a fixed percentage of every treaty in the contract. One reinsurer may take 5% across the board, another may take 10%, and so on, until the umbrella contract is totally placed. All the treaties that compose the umbrella contract are written as one block of business; hence, the reinsurers are prohibited from choosing which treaty they want to reinsure. By combining all the reinsurance treaties into one contract, if a catastrophe loss results, each reinsurer will assume only a percentage of the loss instead of assuming the entire loss by itself.
Popular Insurance Terms
Same as term Contingent Business Income Coverage Form: coverage for loss in the net earnings of a business if a supplier business, subcontractor, key customer, or manufacturer doing ...
Specific powers granted by the principal (the insurance company) to the agent in the contract. ...
in life insurance, difference between the face value of a life insurance policy and its cash value (also known as "pure amount of protection"). ...
Expenses that have or may not yet have been paid by an insurance company. ...
Life or health insurance policy written on an applicant who has passed a medical examination and signed the application but has not paid the premium due. ...
Commission paid to a broker for selling an insurance company's products. This fee may or may not include an expense allowance depending on the amount of business the broker places with the ...
Policy in which an insurer agrees to pay property or liability losses in excess of a specific amount per occurrence. For example, this type of coverage typically is used by an employer that ...
Coverage in the event that the negligent acts or omissions of an insured result in damage or destruction to another's property. Coverage can be purchased with bodily injury liability under ...
Denial of coverage for damage, in inland marine insurance, stemming from routine use of the property. Property can be expected to deteriorate somewhat over time from normal use. This is not ...
Have a question or comment?
We're here to help.